Kiwis at the front of the queue?

Anthony R0bins
11 years ago
Categories: capitalism, national, Privatisation
Tags: asset sales, broken promises, not yours to sell

One of the promises that Key made about asset sales was that Kiwis would be “at the front of the queue”. For the past several days, however, there has been speculation that Mighty River Power shares would be listed in Australia:

Mighty River shares to be sold in Australia – reports

Shares in Mighty River Power will be available to investors on the Australian stock exchange, according to reports from across the Tasman.

A leading Australian business newspaper is reporting that shares in the state-owned enterprise will be “dual-listed” in both countries.

The revelation has prompted Labour to hit out at the Government, accusing it of breaking its promise to New Zealanders that they would be the first in line to buy shares.

See also The Herald’s coverage. Apparently an official announcement is due today, but it’s not likely that these media reports are wrong, as pretty much confirmed by Key on RNZ this morning:

The Labour Party says listing the shares on the Australian stock exchange contradicts the promise to prioritise New Zealand investors.

But Mr Key says where the shares are listed is irrelevant as the Government will determine the make-up of the ownership once it has gauged the level of interest from potential investors.

That “make-up of ownership” has previously been described as:

…between 85 per cent and 90 per cent will be held by New Zealanders, including its own 51 per cent stake.

Note that last important caveat. So, up to 30% of the current share offering can be sold off-shore (half the shares are on sale, 30% of that gives us 15% of the total assuming Key goes with 85% “held by New Zealanders”).

According to the overwhelming majority of public opinion, and simple common sense, these assets should not be sold. But if they are, and the demand is there, why not 100% Kiwi owned? Why will up to 30% of the current offering be flogged off overseas? (Note also, of course, that as soon as the shares are sold, there is nothing to stop Kiwis flicking them off to overseas buyers, and the percentage of Kiwi ownership will quickly plummet). So much for Kiwis at the front of the queue indeed.